Report: rejecting $1.1B annually in federal education funds would present major tradeoffs for Tennessee

Next week, a Republican-led group of legislators will consider rejecting federal K-12 education funds. A new report highlights the major tradeoffs and uncertainties associated with this idea.

The analysis comes from the nonpartisan Sycamore Institute. It finds that Tennessee typically receives about $1.1 billion per year from the federal government for K-12 education programs. The report relies largely on pre-pandemic data since COVID-19 prompted unusually large federal contributions.

Typically, the funding mostly goes toward services for low-income kids and students with disabilities. They include the Individuals with Disabilities Education Act and the Child Nutrition Act.

Lawmakers have said they want to get rid of some of the “strings” attached to these programs and make up the money with state funds.

But the nonpartisan Sycamore Institute finds that, even if Tennessee did reject the money, many requirements could remain — opening the door to legal battles. 

At the same time, the report finds the federal government hasn’t always delivered on its funding promises. Rejecting federal funding could alleviate the administrative burden at the state level, but it’s less clear whether individual school districts would also see a reduction in paperwork.

Report author Mandy Spears says Tennessee likely has room in its budget to make this move, but there is an opportunity cost.

“It really represents what else we could do with those dollars, whether that is new spending in other areas, additional spending on schools or even tax cuts,” Spears said.

And the state’s financial picture isn’t as rosy as it had been early this year. 

“If another recession hit or something unforeseen like a pandemic, would we still get access to those funds that would help us sort of weather these tough times?” Spears said.

Another consideration for lawmakers is Tennessee taxpayers. Tennesseans pay federal income taxes that help fund education programs. If the state rejected its share of those funds, the U.S. Department of Education would likely redistribute the money to other states.

Tennessee would be the first state to ever reject federal funding for education. Spears says she hopes the Sycamore Institute can be a resource to lawmakers as they consider how turning down this money would impact students and the state as a whole.

Find the full analysis here.

A committee of mostly Republican legislators is set to meet Monday, Nov. 6.